06 APR 2011
Debate on corporate governance opened up in Europe
By Jill Treanor | The Guardian
A "say on pay" could be introduced across Europe, along with potential quotas for the number of women in boardrooms, as a result of proposals outlined by the European commission.
British companies have been required to put their remuneration policies to a shareholder vote since 2003 when pharmaceutical company GlaxoSmithKline became the first company to have its pay plan opposed by its investors.
Europe is now asking whether companies across the 27 member states should be forced to put their remuneration policies to a vote by shareholders – and indeed even make disclosure on pay mandatory for both executive and individual directors for the first time in some countries.
The green paper said: "A mismatch between performance and executive directors' remuneration has also come to light."
Outlining 25 questions, on which responses are due by July, the commission asked whether companies should be required to "ensure a better gender balance on boards".
Women comprise 12% of board members across the EU and the commission's paper said: "Gender diversity can contribute to tackling group-think. There is also evidence that women have different leadership styles, attend more board meetings and have a positive impact on the collective intelligence of a group".
Michel Barnier, a European commissioner, said: "We need companies' boards to be more effective and shareholders to fully assume their responsibilities."
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